A Cloudy Future: Why It Matters If SoundCloud Lives Or Dies

Nine years ago, Alexander Ljung and Eric Wahlforss, a pair of Swedish DJs and programmers who’d moved to Berlin, created what Ljung would later describe to Billboard as something akin to a Flickr for DJs and musicians. Flickr, as you might recall, was a photo-saving and -sharing site that once dominated its field in a way that, in 2010, seemed insurmountable, only for both Facebook and Instagram to usurp it within three years. SoundCloud, on the other hand, has yet to be usurped as a creator’s platform and crucial incubator for all manner of pop, particularly EDM and hip-hop — except, perhaps, by its own doing.

Last week, an announcement that SoundCloud had only enough capital to keep running for another few months (first reported as fifty days, then amended to eighty) sent shock waves through the independent-music ecosystem. And in an echo of the last days of Napster 1.0, it sent scores of listeners to their computers to grab as much music as they could while it was still there for the taking — only for Chance the Rapper to announce on Twitter that a phone call he’d made to Ljung had steadied the waters, which SoundCloud itself more or less corroborated on Twitter: “*airhorn* Spread the word: your music isn’t going anywhere. Neither are we.”

The Napster comparison is not idle. Along with Spotify, SoundCloud is one of the two most efficacious musical delivery systems to emerge since the ascension of the iPod. Its one-click shareability, in particular, was so successful that nearly every music blog to emerge in its wake has oriented itself to SoundCloud — whose usability as an embedded player for blogs and social media pre-dates Spotify’s by five years. So, too, every new record label, every songwriter with a new tune, every DJ with a new set, every producer with a dream. SoundCloud allowed users to make their pages and streams private and invite-only — perfect for publicists and labels, who could distribute yet-to-be-released new music selectively to writers and DJs without the hassle of the labyrinthine, laborious downloading and streaming systems the majors began using in the late 2000s. “We’re in the Wild West with streaming, still,” one publicist says. “Why have five clicks when you can have just one?” The idea of SoundCloud suddenly going away, the publicist says, would be “like hearing, ‘The U.S. mail isn’t delivering CDs anymore’ in the late Nineties.”

The showdown appeared to have come last week. On July 12, TechCrunch published a scathing report from Josh Constine surmising that SoundCloud’s morale was bottoming out at the same rate as its coffers. A reported 173 positions — 40 percent of the staff — were eliminated. A former SoundCloud employee, speaking to the Voice on the condition of anonymity, disputed portions of the TechCrunch piece but agreed that the company is rudderless. “I kept waiting for them to hire a rock star senior leader to steer the company, but they never did,” said the ex-employee. “When they moved away from focusing on creators, I knew it was time to go.”

That focus, particularly early on, is what made SoundCloud successful in the first place. “We still haven’t done any advertising or anything like that,” Ljung admitted in October 2010. “There’s been no real marketing around it….We started from our feeling that there was really something lacking on the creators’ side. We knew that there were a lot of creators out there.”

The time and place of SoundCloud’s origins are important to consider. In 2007, Ljung and Wahlforss were in the thick of a bustling Berlin tech and techno scene. The city had remade itself in the face of a severe miscalculation of the effects of post-Wall reunification. As Tobias Rapp wrote in his 2009 chronicle, Lost and Sound: Berlin, Techno and the Easyjet Set, “an overly optimistic budget forecast made in the early Nineties” meant that “as a result, Berlin, a city with three and a half million residents which is designed for around five million, didn’t grow — it shrank.” One way it made up for that was by offering a residence/artist visa that allowed one to live in Berlin so long as one’s income mostly came from outside of it — a boon to programmers, coders, and creatives who worked remotely, not to mention liked to party alongside a continent’s worth of weekenders — the “Easyjet Set” of Rapp’s title — who flew in to hit the city’s techno clubs. Prior to launch, Ljung and Wahlforss got the ball rolling by handing out free accounts to their favorite DJs.

SoundCloud, then, was by DJs for DJs. It just so happened that its orange casing, its waveform, its ability to target a comment to any point on an upload’s unfolding time grid, and its possessing the easiest interface imaginable happened to apply to discrete songs as well as DJ sets.

SoundCloud came along right as the availability of DJ mixes online began to proliferate. A year prior, in 2006, dance music website Resident Advisor began its weekly podcast series, sending a new DJ set to your iTunes every week, and soon every other dance site began doing the same — right, of course, as the number of dance sites began to mushroom. It didn’t take long for all of them to begin using SoundCloud as their primary library. Nor did it take most DJs long to do that themselves.

And make no mistake: As much as Daft Punk at Coachella or the Electric Daisy Carnivals in L.A. and Vegas, SoundCloud broke EDM in the U.S. Suddenly the DJ mixtape, long an underground dance music staple that had yet to fully track outside of the subculture, was right there for the listening. You could headline Coachella’s DJ tent and zip your set up to SoundCloud an hour later, and all your fans would find it there, and listen to it, and share it, and embed it. In 2014, Astralwerks a&r man Lawrence Lui compared SoundCloud’s effect to “what Dave Matthews Band did by allowing fans to come to shows and record their live sets, creating a marketplace for trading them for free. I think a similar thing is happening with electronic music right now, where artists will put a set up from a show. It brings in this whole social aspect that was previously unseen.” SoundCloud is where young DJs discover music — period.

But recorded DJ mixes are the thorniest of musical commodities. And with its endless handshake deals and pretend-you-didn’t-hear-that-sample ethics, dance music tends to stay underground in part to protect itself from the legal consequences of reconfiguring other people’s properties by the handful. Like a lot of tech companies, SoundCloud was a great idea without a real business model. Clearly, SoundCloud couldn’t have survived purely as a DJ- and creator-driven platform, so it introduced subscription streaming, à la Spotify, Apple Music, and Tidal. Not only was almost no one interested in paying for something they’d gotten free for years, a number of tracks and DJ sets suddenly disappeared from the site once the majors turned their attention to it.

Although its roots are in dance music, SoundCloud has been most visible as a conduit for hip-hop. As Spin’s Jordan Sargent notes, “there was never rap named after mixtape websites — no ‘Datpiff rap’ or ‘LiveMixtapes rap.’ There was no Best Buy rap or Sam Goody rap.” But there is most certainly SoundCloud rap. Any mixtape from the Weeknd to NoName would make its way to the site.

So it wasn’t a surprise when, after Chance tweeted a request on Friday morning for “an artist who you wouldn’t know if not for @SoundCloud,” he landed a bombshell: “Just had a very fruitful call with Alex Ljung. @SoundCloud is here to stay.” (Later that night, Chance uploaded a new track with Young Thug, “Big B’s,” exclusively on SoundCloud.) A SoundCloud rep told Variety that “the rapper is essentially spreading good vibes about the company during a challenging time and that if he is making a more material commitment to the service, she is unaware of it.” Killing MTV News and saving SoundCloud — talk about power.

Nevertheless, we should probably ready ourselves, in some manner, for SoundCloud’s demise. There are already DJ-centric successors such as Mixcloud and hearthis.at, and songs and albums on Bandcamp. Uploading music for free in a universally applicable way will be harder; YouTube is less appealing to musical aspirants than it is to meme creators and showbiz kids.

One of Ljung’s stated goals, per a 2015 Billboard interview, is to “not just monetize but also create a functioning platform for more user-generated content, like mash-ups and remixes,” as well as DJ mixes containing unlicensed music: “It’s a huge part of music culture today, and we’ve taken on the challenge. I don’t think anybody can solve everything, but we’re aiming to solve the majority of it.” A truly outlaw format such as the DJ mix, where part of the creativity involves being able to ignore rights issues, continues to resist that kind of full integration into the old-biz way of doing things. And so does SoundCloud, whose killer app came for free, hamstringing later attempts to monetize it.